Types of Investment Risk - Practice Questions 5 - 9

Jesus Pimental is opening an UTMA account for his grandnephew Dillon who is seven years old. The account objective is to accumulate money towards a college education. As a fiduciary, Pimental should be most concerned with:

Loss of principal

Short term volatility

Inflation risk

Liability mismatching

Diversifiable risk includes all of the following except:

Political risk

Market risk

Business risk

Default risk

Industry risk

Recapitalizations, management or leveraged buyouts and restructurings are all events that could impact the quality of a company's debt. This sort of risk is referred to as:

Reinvestment risk

Capital risk

Purchasing power risk

Event risk

All of the following investments and strategies would be unsuitable for seniors, EXCEPT: